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Here's what the NBA's new media deal means for hoops fans 2024-07-25 15:21:00+00:00 - The Summary The NBA's new media rights deal means a big shift in where people will be watching games starting in 2025, adding NBC and Amazon and moving away from TNT. ABC and ESPN will still broadcast games, and will also retain exclusive broadcasts of the NBA Finals. Fans will have to subscribe to two streaming platforms, Peacock and Amazon Prime, in order to access the complete slate of games. The NBA will still offer its League Pass subscription service. The NBA announced a new media deal late Wednesday that would end its long-standing relationship with TNT, while adding and restarting partnerships with Amazon and NBC — expanding the reach of professional hoops but potentially posing new access issues to fans. Starting in the 2025-2026 season, existing partner ABC and its sister network ESPN will now share broadcast rights with Amazon Prime Video, NBC and the NBCUniversal-owned Peacock. The league is seeking to wind down its 35-year tie-up with TNT, although it is now facing a lawsuit from TNT's parent, Warner Bros. Discovery, as it does so. Barring a dramatic last-minute change, all of this means the upcoming 2024-2025 season will be the last to feature the popular "NBA on TNT" broadcast. Co-anchor and NBA Hall of Famer Charles Barkley said last month he would retire from TV following this season. “Our new global media agreements with Disney, NBCUniversal and Amazon will maximize the reach and accessibility of NBA games for fans in the United States and around the world,” NBA Commissioner Adam Silver said in a statement. “These partners will distribute our content across a wide range of platforms and help transform the fan experience over the next decade.” Comcast’s NBCUniversal is the parent company of NBC News. The new arrangement means that a year from now, NBA fans looking for a complete national viewing schedule will have to subscribe to two streaming platforms: Peacock and Amazon Prime Video. And if they want to avoid traditional TV entirely, they’ll need a third: ESPN’s upcoming streaming service. Still, many games will be available through traditional broadcast channels on ABC and NBC, and through cable via ESPN. The NBA will continue to sell a separate League Pass subscription that starts at $14.99 a month. Here's what a sample basketball week looks like according to the new agreement: Monday: Peacock Tuesday: NBC broadcast network and Peacock Wednesday: ESPN Thursday: Amazon Prime Video Friday: Amazon Prime Video or ESPN Saturday: ABC broadcast network or Amazon Prime Video Sunday: ABC and NBC broadcast networks Early-round playoff games will also be split up among the networks; ABC will remain the exclusive home of the NBA Finals. The deal also includes expanded WNBA coverage among those networks, with 125 games slated to be televised. The deal marks a return of the basketball league to NBC after a run from 1990 to 2002 that coincided with the game's rise to international popularity led by stars such as Michael Jordan, Shaquille O'Neal and Kobe Bryant. Mike Tirico will anchor the network's coverage, NBC Sports President Rick Cordella told Richard Deitsch of The Athletic on Wednesday. For the past 22 years, games have been split among ABC, ESPN (both owned by Disney) and TNT. The most recent agreements with those networks generated $24 billion, according to CNBC. With the new deal, the NBA has nearly tripled that figure to approximately $76 billion, according to The Associated Press. Live sporting events are highly coveted by broadcast groups because of the viewership they can command. This year's regular season averaged 1.09 million viewers across ABC, ESPN, TNT and the league-owned NBA TV. While that was up just 1% from last year, it was the highest all-network average in four years, according to Sports Media Watch. Last year’s NBA playoffs was the most watched in 11 years, according to Nielsen. In fact, annual ratings churn is not necessarily the most important part of the negotiations for sports broadcast rights. Rather, the slate of games themselves — known as "inventory" in the industry — is valuable in itself as it ensures a consistent audience. "Inventory is what matters," said Jon Lewis, who runs SportsMediaWatch.com. "If you're trying to build up a streaming service like Peacock, or Amazon sports, that inventory is a big deal. They're clearly willing to pay a lot for it."
U.S. economy grew 2.8% last quarter as growth hit the gas 2024-07-25 15:02:00+00:00 - The nation's economy remains robust as the latest GDP data shows growth at a 2.8% annual rate, far exceeding economists' expectations of a weaker 1.9% annual pace of growth. Consumers and businesses helped drive growth despite the pressure of continually high interest rates. Thursday's report from the Commerce Department said the gross domestic product — the economy's total output of goods and services — picked up in the April-June quarter after growing at a 1.4% pace in the January-March period. Growth last quarter also picked up because businesses increased their inventories. Despite last quarter's uptick, the U.S. economy, the world's largest, has cooled in the face of the highest borrowing rates in decades, engineered by the Federal Reserve to fight high inflation. From mid-2022 through 2023, annualized GDP growth had topped 2% for six straight quarters. In last year's final two quarters, GDP expanded by rates of 4.9% and 3.4%. The state of the economy has seized Americans' attention as the presidential campaign has intensified. Although inflation has slowed sharply, to 3% from 9.1% in 2022, prices remain well above their pre-pandemic levels. Federal Reserve Chair Jerome Powell has said the central bank need to see more proof that inflation is getting closer to its 2% target before starting to cut rates. "In short, Q2 real GDP surprised to the upside, with the annualized growth rate accelerating to the fastest pace since Q4 2023," noted Rubeela Farooqi, chief U.S. economist at High Frequency Economics in a Thursday research note. "And after an unexpected blip in Q1, inflation is once again receding." He added, "For the Fed, these data support a cautious approach to rate decisions although with inflation once again receding, we think rate cuts remains the most likely outcome." This year's slowdown reflects, in large part, the much higher borrowing rates for home and auto loans, credit cards and many business loans resulting from the Fed's aggressive series of interest rate hikes. The Fed's rate hikes — 11 of them in 2022 and 2023 — were a response to the flare-up in inflation that began in the spring of 2021 as the economy rebounded with unexpected speed from the COVID-19 recession, causing severe supply shortages. Russia's invasion of Ukraine in February 2022 made things worse by inflating prices for the energy and grains the world depends on. Prices spiked across the country and the world. Economists had long predicted that the higher borrowing costs would tip the United States into recession. Yet the economy kept chugging along. Consumers, whose spending accounts for roughly 70% of GDP, kept buying things, emboldened by a strong job market and savings they had built up during the COVID-19 lockdowns. The slowdown at the start of this year was caused largely by two factors, each of which can vary sharply from quarter to quarter: A surge in imports and a drop in business inventories. Neither trend revealed much about the economy's underlying health. Consumer spending did slow as well, though. Fed officials have made clear that with inflation slowing toward their 2% target level, they're prepared to start cutting rates soon, something they're widely expected to do in September.
Macron woos top foreign business chiefs after political chaos 2024-07-25 15:02:00+00:00 - Barely six weeks after he dissolved parliament and plunged France into political chaos, Emmanuel Macron has sought to reassure 40 of the world’s most influential businessmen that his country remains a good investment. Guests at a sit-down lunch at the Élysée palace on Thursday included Tesla’s Elon Musk, Coca-Cola’s James Quincey, Airbnb’s Brian Chesky, YouTube’s Neal Mohan and Eli Lilly’s David Ricks. Joe Tsai of Alibaba, Shou Zi Chew of TikTok, Aditya and Lakshmi Mittal of ArcelorMittal and Lee Jae-yong of Samsung were also in attendance, as was Bernard Arnault of LVMH. Macron called snap elections on 9 June after suffering a humiliating defeat in European parliamentary elections at the hands of Marine Le Pen’s far-right National Rally (RN), and business leaders “are obviously paying close attention” to the ensuing uncertainty, an Élysée official said. The RN won the first round of France’s snap general election, but a “republican front” and mass tactical voting returned a parliament dominated by three large blocs, none with anywhere near the 289 seats needed to form a government. Macron said this week that the outgoing government would remain in a caretaker capacity until the end of the Olympics, and that parties would have to compromise if a stable majority capable of passing a budget and new legislation was to emerge. “Of course this event will be a bit special, after the political events of the past few weeks,” the Macron adviser said last week. “The goal will be mainly to explain to foreign chief executives the president’s actions, particularly the dissolution. “For foreign investors, what matters is the policy that’s been carried out, continuity and stability, providing certainty. The president will seek to reassure the CEOs attending about the choices he made.” Macron’s centrist, pro-business camp warned repeatedly during the election that victory for either the RN or the New Popular Front, dominated by the radical left France Unbowed (LFI), would damage France’s economic stability and deter foreign direct investment. Both groups plan to increase public spending significantly, including boosting the minimum wage, and raise corporate taxes. Under Macron, France has topped the European foreign direct investment (FDI) league for five years running, ahead of Germany and Britain. Earlier this year. before his annual “Choose France” summit, the president’s office announced €15bn (£12.6bn) of new foreign investment in 56 projects, including €4bn from Microsoft, €1.2bn from Amazon and €1bn each from Pfizer and AstraZeneca. skip past newsletter promotion Sign up to This is Europe Free weekly newsletter The most pressing stories and debates for Europeans – from identity to economics to the environment Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion None of those investments had so far been cancelled or paused, the Élysée adviser said, adding that no announcements would be made after the lunch, which was designed to capitalise on the “positive ambience” generated by the Olympic Games. Data from France’s statistics office on Thursday, however, showed that French industry morale slumped unexpectedly in July. Laurent Favre, the CEO of the car parts supplier Opmobility, said earlier this week that manufacturers liked stability. “When we change policy every three minutes, it’s never good,” he said. “For industry, the lack of visibility means stress and, effectively, no investment.”
Post Office managers were ‘thugs in suits’, Vince Cable tells inquiry 2024-07-25 14:49:00+00:00 - The former Lib Dem leader Sir Vince Cable has labelled Post Office managers “thugs in suits” and claimed he would have got to grips with the Horizon IT scandal if MPs campaigning for branch owner-operators had bothered to have in-person meetings with him. Cable, who was business secretary for an unusually long period between 2010 and 2015, told the inquiry into the scandal that he never learned who lead campaigner Sir Alan Bates was until just before he left office. He said none of a group of 140 MPs campaigning on behalf of post office operators came to talk to him about the issues with the Horizon accounting software, adding that “writing polite letters” was not the way to get things done. In 2015, James Arbuthnot, who tirelessly campaigned on behalf of those wrongly prosecuted, criticised Cable for listening to the Post Office but not the group of MPs and the branch owner-operators affected by what has been described as the UK’s biggest ever miscarriage of justice. “What is strange about this whole episode is that none of these 140 MPs ever came to talk to me,” Cable told the public hearing on Thursday. “All MPs realise that writing polite letters is not necessarily the way to get through to people in government. You have to talk to them face to face.” Jason Beer, counsel for the inquiry, asked whether he was blaming the campaigning MPs for not making more effort to see him in person. “I am not blaming them,” said Cable, who said he only began to “smell a rat” in March 2015, just before parliament was dissolved. “It is not a question of blame. Let’s just say it was unfortunate I never had any personal contact with the MPs about this matter.” Beer asked whether it really would have been any different if they had, given government officials and the Post Office had managed to maintain a line that there was no issue with Horizon across his time in post. “Probably, there would have been [a different outcome],” Cable replied. “I would have realised much earlier than March 2015 that serious problems were not being properly addressed by the Post Office and the department and would have started to interrogate it much more aggressively, as I did on quite a lot of other issues when MPs came to see me.” Cable said he agreed with a description of Post Office management as “thugs in suits” and had a goal of rebalancing the relationship between management and branch owner-operators during his time in office. He recounted a story about challenging eight branch closures in his constituency, before he entered government, and being treated poorly by the organisation’s “middle management”. “Mr Bates has, I believe, described them as ‘thugs in suits’ and I recognise the description,” said Cable in his witness statement. “And [the Post Office] dealt with us in an arrogant way when we campaigned against closures.” skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Despite a desire to rebalance the relationship between the organisation and branch operators, the issue of the faulty Horizon IT system, which resulted in more than 700 owner-operators being prosecuted between 1999 and 2015 for theft, fraud and false accounting by the Post Office, was rarely ever raised with him. “Problems with Horizon barely came across my desk,” he said. “When they did, it was usually in a very uncontroversial way and not drawn to my attention as an issue I should focus on. General reason is that the officials who were briefing me and ministers on the subject hadn’t seen it as a particular problem.” Cable admitted that he should have been more thoroughly briefed on the Horizon system at the time. “In hindsight, I should have been told at the outset what Horizon was,” he said. “That competent people … were suggesting there was a risk factor, and I should have been told about Mr Bates and the justice group. I never heard his name until I’d been in the job five years. I wasn’t briefed on them.”
Qualcomm Stock Could Be On The Verge of an Impressive Rally 2024-07-25 14:47:00+00:00 - QUALCOMM Today QCOM QUALCOMM $175.39 -5.68 (-3.14%) 52-Week Range $104.33 ▼ $230.63 Dividend Yield 1.94% P/E Ratio 23.57 Price Target $199.63 Add to Watchlist Equities across the board are starting to soften after months of gains, making it a good time to go bargain-hunting. Many of the stocks that have enjoyed triple-digit percentage gains this past year are also facing some of the heavier selloffs. Qualcomm Incorporated NASDAQ: QCOM, a semiconductor tech stock, for example, is in the middle of a 20% drop after a 120% rally. The bears will say that everyone is finally realizing how overly reliant the market has become on a few big stocks, particularly those related to artificial intelligence (AI). However, the more optimistic investor will see this as a potential buying opportunity and will be on the lookout for discounted stocks. Qualcomm is one such stock that’s been flagged as a potential bargain, so let’s jump in and take a closer look. Get QUALCOMM alerts: Sign Up Qualcomm's Bullish Performance Inspires Analyst Optimism QUALCOMM MarketRank™ Stock Analysis Overall MarketRank™ 4.93 out of 5 Analyst Rating Moderate Buy Upside/Downside 13.8% Upside Short Interest Healthy Dividend Strength Strong Sustainability -0.89 News Sentiment 0.59 Insider Trading Selling Shares Projected Earnings Growth 13.01% See Full Details There are a couple of reasons to be excited about Qualcomm. First, they’re performing well as a business and have been delivering earnings reports that have smashed analyst expectations. Their Q2 numbers, for example, were strong across the board, while management’s forward guidance was considerably higher than expected. Seeing earnings beats of this nature is one of the most compelling signs that a stock is performing well and that any subsequent harsh drop might be overdone. Investors will get a fresh look at Qualcomm’s performance when the company delivers its Q3 numbers next week, but for now, there are no reasons to think it won’t be similar to last time. Several analysts have picked up on this theme over the past week, reiterating the bullish outlook on Qualcomm stock and even increasing their price targets. These kinds of optimistic calls, both during a 20% drop and ahead of an earnings report, speak volumes to their level of conviction in the buying opportunity here. Qualcomm Is a Top Pick in the Semiconductor Industry Take the team over at Susquehanna, for example. They reiterated their positive rating on Qualcomm last week and gave the stock a boosted price target of $250. The Robert W. Baird team echoed this on Tuesday of this week and did the very same thing. Considering Qualcomm shares closed at $181 last night, these refreshed price targets point to an attractive upside of almost 40%. In a note to clients, Baird named Qualcomm as a top pick from the semiconductor industry, pointing specifically to the company’s bullish exposure to AI and strong market demand for its products. Similarly, Susquehanna also sees strong end-user demand driving sales beyond current forecasts, to the extent they were bullish enough to raise a price target on a falling stock right before its earnings report. Qualcomm's Attractive Technicals For those of us on the sidelines, there’s also the technical side to consider. Like many other equities in recent weeks, Qualcomm stock was, by many measures, starting to look a little frothy. Take its relative strength index (RSI), for example. In June, it was giving a reading of 82, indicating extremely overbought conditions. For context, anything above 70 on the RSI is considered overbought, while anything below 30 is considered oversold. So, with Qualcomm shares having been extremely overbought just a few weeks ago, it’s perhaps no surprise they’re experiencing a correction. But the slide has been so steep that the stock is now verging on oversold levels. With a current RSI of less than 36, Qualcomm's RSI would only take one or two more red days to indicate extremely oversold levels. If that happens, don’t be surprised to see buyers swooping in en masse, as this will be simply too good an entry opportunity to miss. QUALCOMM Incorporated (QCOM) Price Chart for Thursday, July, 25, 2024 Before you consider QUALCOMM, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and QUALCOMM wasn't on the list. While QUALCOMM currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Conviction Firms For Chipotle Stock's 25% Share Price Increase 2024-07-25 14:28:00+00:00 - Chipotle Mexican Grill Today CMG Chipotle Mexican Grill $50.82 -0.96 (-1.85%) 52-Week Range $35.37 ▼ $69.26 P/E Ratio 54.23 Price Target $64.52 Add to Watchlist Chipotle Mexican Grill NYSE: CMG was not immune to the broad market sell-off. Still, its operational quality belied the move and proved it was a buy-the-dip opportunity. The Q2 results continue the existing trends, which include growing comps, store count, and margin. The primary takeaway is that the company built leverage for itself in Q2 and continues to do so today, and shareholder value is improving. The balance sheet highlights include a 43% increase in the cash balance, uber-low leverage, and a 20% increase in equity that supports the high valuation. The stock is valued at roughly double its peers, but how many other restaurant stocks are growing at a double-digit pace, have a fortress balance sheet, and are on track to more than double in size? Get Chipotle Mexican Grill alerts: Sign Up Chipotle Mexican Grill Has Another Smoking Hot Quarter The appointment of Brian Niccol to the CEO position was a gift for Chipotle investors that keeps on giving. His focus on operational quality, digitization, and consumer experience drives the company's current success. Chipotle reported $2.97 billion in net revenue, a gain of 18.3% over last year, outpacing the consensus estimate on strength in transactions and ticket averages. Comp-store sales grew by 11.1% on an 8% increase in transactions compounded by a 2.4% increase in check average and increased store count. Chipotle opened 52 new stores, including 46 Chipotlanes and one international location. Chipotlanes is critical because it enhances unit and digital sales, leveraging fixed costs into higher margins. Digital sales accounted for 35.3% of the net and are expected to remain strong indefinitely. Margin is another area of strength. The company reported a 140-basis-point improvement in the restaurant-level operating margin that carried through to the bottom line despite marketing and ad spending. Systemwide, the operating margin grew by 250 basis points to 19.7%, exceeding forecasts and company guidance. The takeaway is that the 33 cents in diluted GAAP earnings and 34 cents in diluted adjusted earnings are up 33% and 36% YoY, respectively, driving robust cash flows and outpacing the consensus by 625 bps. The guidance is favorable but shadowed by an expectation for margin pressure as the year progresses. Not only is the company dealing with consumer pushback after its portion-control efforts, but Mr. Niccol and the company are hesitant to issue more price increases. Moving forward, the story will be about efficiency and cost control; the takeaway is that the margin is strong enough to sustain the growth and capital return outlook, even if there is some contraction. Analysts Trim Targets: Range Narrows Around Consensus Chipotle Mexican Grill MarketRank™ Stock Analysis Overall MarketRank™ 4.73 out of 5 Analyst Rating Moderate Buy Upside/Downside 23.9% Upside Short Interest Healthy Dividend Strength N/A Sustainability -1.96 News Sentiment 0.49 Insider Trading Selling Shares Projected Earnings Growth 20.91% See Full Details The analysts' response is mixed but favorable to the share price because the number of analysts covering it and the narrowing range suggest a firming conviction within the market. MarketBeat tracks 15 revisions from 26 analysts with 15 lowered price targets but to a narrowing range bracketing the pre-release consensus. The consensus price implies a 25% upside for the stock, and the consensus sentiment is firm at Moderate Buy. The price action in CMG is up following the release. Early premarket action has the stock up about 2% and showing signs of support at the recent low. If the market follows through with this move, the stock price could advance, and the rebound could be vigorous, possibly setting a new high by the end of the year. The risk is that this market is below critical moving averages that may cap gains given the current broad-market environment. In this scenario, there is a risk that CMG shares will remain under pressure, possibly setting new lows before the rebound begins. The critical support target is near the split-adjusted level of $51.50; if it fails to hold, CMG stock could fall to the $45 level or lower. Before you consider Chipotle Mexican Grill, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Chipotle Mexican Grill wasn't on the list. While Chipotle Mexican Grill currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Anglo American takes further £1.2bn writedown on Yorkshire fertiliser mine 2024-07-25 14:11:00+00:00 - Anglo American has taken a further £1.2bn ($1.6bn) writedown on its fertiliser mine in North Yorkshire after setting out plans to pause work on the project while it undertakes a sweeping overhaul of the business. Anglo plans to slash its investment in the Woodsmith fertiliser mine – in the North York Moors national park, near Whitby – next year from £1bn annually to £200m, before seeking strategic investors to restart full-scale work on the polyhalite project from 2026. The miner’s chief executive, Duncan Wanblad, told journalists that its £6bn flagship project could still begin producing polyhalite by the end of the decade if the company’s balance sheet is strengthened and a joint-venture partner is found. It was initially expected to begin production in 2027. The writedown on the Woodsmith project, which was widely expected, led the company to a £544m loss for the first half of the year. Anglo revealed the latest financial blow months after surviving a £38.6bn takeover bid by its larger rival BHP, which has piled pressure on Anglo’s board to shake up the strategy of the 107-year-old company. Wanblad said the 18-month restructuring, which includes plans to sell the diamond business De Beers, was on track to complete by the end of next year. The historic corporate overhaul includes separating its platinum business and selling its coalmines. He said: “We are moving at pace to create a much more agile and structurally profitable mining company focused on our exceptional quality copper and premium iron ore businesses, which both continue to perform very strongly, while maintaining our growth optionality in crop nutrients. “We are committed to completing the key elements of this transformation by the end of 2025, creating a simpler, highly valued mining company with extensive growth options and considerable strategic flexibility.” Anglo is planning to sell De Beers amid falling prices in the global diamond market due to the sluggish global economy and rising competition from lab-created alternatives. The company cut its diamond production on Thursday for the second time this year in an effort to ease oversupply in the market. Wanblad said the company faces a “weak cyclical market” with a recovery expected to be delayed until next year. The market will not stop the company’s plans to sell De Beers, he said. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion The planned coalmines sale was also cast into doubt at the end of last month by an explosion at its Grosvenor mine in Australia. The company still plans to sell the entire coal business, including the affected mine, by the end of the year. “Most importantly, everyone there is safe. Our process to divest that business is well under way with continued strong interest from a large number of potential new owners,” Wanblad said. The company reported two fatalities from an accident at the company’s Amandelbult platinum mine in South Africa in the first half of the year. Anglo expects to demerge its platinum business, Amplats, next year and is planning a secondary listing in London.
Beauty Retailer Stock Brings Early Christmas for Value Investors 2024-07-25 14:10:00+00:00 - Every once in a while, the stock market becomes severely disconnected from a company's true value and fundamentals, as the stock price reflects a widening disconnect between that company's true value and what the market's feelings dictate the price is today. In other words, value investors often sit on cash reserves, waiting for these big disconnects between price and value. Ulta Beauty Today ULTA Ulta Beauty $363.30 -6.31 (-1.71%) 52-Week Range $363.01 ▼ $574.76 P/E Ratio 14.17 Price Target $497.61 Add to Watchlist As the market starts to rotate out of the high-flying stocks in the technology sector, particularly those dealing with artificial intelligence like NVIDIA Co. NASDAQ: NVDA, worrying sentiment has also had a contagion effect in other areas. Today, investors can find the latest value deal in shares of Ulta Beauty Inc. NASDAQ: ULTA, which recently hit a new 52-week low price on nothing but a broader market selloff. Often, investors can justify a stock's bearish price action by tying it to some development in the company's financials. Still, when that connection can't be made, it could be time to consider a potential investment in what could turn out to be a discounted asset. Here's why Ulta stock might fit that category. Get Ulta Beauty alerts: Sign Up Why Ulta Stock is the Ideal Hedge in a Declining Market It has nothing to do with the stock's price, which has become painfully apparent for investors holding onto the name today. However, for those savvy enough to stick to the fundamentals despite what the market is doing, here are some pointers to lean on during this volatility. First, most think that Ulta stock is part of the consumer discretionary sector, but that is just not accurate. Skincare and beauty products are more part of the consumer staples sector, as it doesn't matter whether the economy is booming or busting; people will likely always make room in their budgets for these products. Second, Ulta's financials can give a new sense of safety to those primarily focusing on numbers when making a potential investment decision. Gross margin rates of over 42% will place Ulta above other retailer peers like Target Co. NYSE: TGT and its gross margins of only 27.9% today. These high margins allow management to reinvest and manage the business's capital much better, and with a net income margin of over 11%, that job is made even easier. The efficiency of the company's reinvestment policy shows through with a return on invested capital (ROIC) rate of 29.6%, any value an investor wishes for in an investment. Ulta Beauty, Inc. (ULTA) Price Chart for Thursday, July, 25, 2024 Annual stock price performance tends to mirror the long-term ROIC rate when smoothed out over enough time, which is why Ulta stock has had a nearly 1,000% run since 2008 while the S&P 500 only scraped 250%. The fact that Ulta stock now trades at 64% of its 52-week high price could make the future returns a lot better for those willing to take a second look at the company. Sticking with the fundamentals, Ulta's annual report will show investors that over 90% of the company's revenue comes from rewards membership users, a benchmark unseen in today's retail sector. Together, these factors would make Ulta stock one of the best choices for hedging against market volatility. How Wall Street Views Ulta Stock Today Wall Street analysts forecast up to 10.7% earnings per share (EPS) growth in Ulta stock for the next 12 months, which is impressive considering the company is $18.4 billion in market capitalization today. Driven by these EPS expectations, J.P. Morgan Chase & Co. analysts decided to boost their price targets on Ulta stock to $544 a share, daring it to rally by 47.2% from where it trades today. But these analysts weren't the only ones on Wall Street who felt this confident about Ulta stock; those at DekaBank Deutsche (Ulta's largest shareholder) boosted their stake in the stock by 17.8% as of June 2024, bringing their net investment to $109.9 million today. Ulta Beauty MarketRank™ Stock Analysis Overall MarketRank™ 4.80 out of 5 Analyst Rating Moderate Buy Upside/Downside 36.4% Upside Short Interest Healthy Dividend Strength N/A Sustainability -1.83 News Sentiment 0.79 Insider Trading Selling Shares Projected Earnings Growth 10.70% See Full Details There are other ways investors can also find a reward from Ulta stock today, apart from its double-digit upside. Looking into Ulta's latest quarterly earnings results, the financial statements will tell the story. Up to $289.4 billion was allocated to buying back shares of the market, which is one of the most efficient ways to repay shareholders. This capital is free of tax and is now tapped into the double-digit ROIC rates that Ulta generates. What's more, management is so confident about the future of Ulta's financial strength that they have guided toward a further $1 billion in share repurchases for the rest of 2024; at that rate, management would've allocated nearly 10% of the company's market capitalization toward buying back stock, an aggressive move to say the least. Before you consider Ulta Beauty, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Ulta Beauty wasn't on the list. While Ulta Beauty currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Fears of automotive industry downturn as profits slide at Nissan and Stellantis 2024-07-25 14:10:00+00:00 - A collapse in profits at the carmakers Nissan and worse than expected results at Stellantis, the owner of Citroën, Peugeot and Fiat, have deepened fears of a global downturn in the automotive industry. Shares in Stellantis, which is listed in Milan, plunged on Thursday after it published disappointing earnings, while its French rival Renault also tumbled on the back of the wider concerns despite reporting record profitability. Stellantis, a 14-brand group that also includes Alfa Romeo, Chrysler, Dodge and Maserati, said net profit in the first six months of the year had been almost halved to €5.6bn (£4.72bn) for the first half of the year. Its sales fell 14% to €85bn, and were hit by a downturn in Europe and particularly in North America. Also on Thursday, Nissan said its operating profit had collapsed 99% to 995m yen (£5.03m) in the three months to 30 June, with worldwide sales flatlining at just under 800,000. Renault still holds a stake in Nissan, the shares of which plunged more than 10% on Thursday after the company issued a profit warning citing “intense sales competition”, especially in the US. Makoto Uchida, the chief executive of Nissan, blamed the downturn on its performance in the US, saying it was “unable to boost volumes as expected”, which analysts said was partly down to a change over from the old Rogue SUV-type vehicle to a newer model but also to a softening demand. Stellantis pledged to take steps to address problems including output and prices. In a statement Carlos Tavares, its chief executive, said: “The company’s performance in the first half of 2024 fell short of our expectations.” Renault, which earlier this year pledged to bring down the cost of electric vehicles in order to compete with rivals in China, has just signed a deal to build a new low-cost Twingo EV in Slovenia. Results from the industry were published hours after the Society of Motor Manufacturers and Traders, Britain’s car trade body, said production had slipped 7.6% in both conventional and electric vehicles in the UK in the first half of the year. It said the industry produced more than 416,000 vehicles, about 35,000 fewer than the first half of 2023. Mike Hawes, the body’s chief executive, said it was partly down to the transition to the production of electric vehicles as factories repurpose. He called on the government to halve VAT on new battery electric vehicles and scrap an extra levy on luxury cars costing more than £40,000 that the SMMT says hits about 70% of EV trade. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Adding a “carrot” to the market could boost uptake of EVs by 250,000 over three years with experience around the world showing consumers do not respond to “sticks”, Hawes said. The sector is expected to hit bumps in the road ahead as consumers transition from conventional combustion engines to EVs, with affordability and battery anxiety still considered the main barriers to purchase. The Chinese are considered to have a 10-year head start on European and US rivals on the changeover, thanks to an industrial strategy that has enabled the country to build a globally dominant position on the production of lithium hydroxide, one of the most essential and expensive elements in car batteries. The EU recently slapped provisional tariffs on Chinese imports, with Brussels determined to protect the bloc’s auto industry, arguing they had benefited from state subsidies and a range of supports ranging from free land for factories to financial support for shipping to European ports. Agence France-Presse contributed to this report
Southwest Airlines Will End Its Longstanding Open-Seating Policy 2024-07-25 13:25:20+00:00 - Southwest Airlines will start assigning seats to passengers, ending its longstanding policy of allowing passengers to pick their seats once they have boarded, the airline said on Thursday. The new procedure will be implemented to increase revenue and in response to feedback from customers, 80 percent of whom report preferring an assigned seat, Southwest said. “This is the right choice — at the right time — for our customers, our people and our shareholders,” said Bob Jordan, the president and chief executive of Southwest. Even though the airline has been known for its unique seating model for more than 50 years, preferences have evolved, with more customers taking longer flights where they prefer a seat assignment, the statement said. The new policy was reported earlier by The Wall Street Journal.
Ford Stock EPS Disappoints, Shares Plummet After-Hours 2024-07-25 13:16:00+00:00 - Ford Motor Today F Ford Motor $11.16 -2.51 (-18.36%) 52-Week Range $9.63 ▼ $14.85 Dividend Yield 5.38% P/E Ratio 11.51 Price Target $13.95 Add to Watchlist Ford Motor NYSE: F is in the consumer discretionary sector and is the third-largest automobile company in the United States by market capitalization. The company reported Q2 2024 financial results on July 24, 2024. We will examine Ford’s annual filing to better understand its business segments. We will then examine the firm's earnings report. We will finish by providing an outlook on the stock and detailing what Wall Street analysts expect going forward. Get Stellantis alerts: Sign Up Ford’s Business Segments and Sales Channels Ford divides its business into three segments: Ford Blue, Ford Model e, and Ford Pro. Ford Blue encompasses the firm’s sales of Ford and Lincoln-branded vehicles with internal combustion engines and hybrid platforms to retail customers. It also includes parts and services for these types of vehicles. The Ford Model e segment accounts for sales of electric vehicles, their associated parts, and services to retail customers. Ford Pro sells vehicles, parts, and services to commercial, government, and rental customers. Sales of ICE, hybrid, and electric vehicles to these customer types fall within this segment. Ford's biggest competitors include General Motors NYSE: GM and Stellantis NYSE: STLA. Together, they make up the "Detroit Three" automakers. Ford's Earnings: Warranty Costs and EV Losses Hurt Operating Income Ford’s financial results fell woefully below expectations. It reported adjusted earnings per share (EPS) of 47 cents. Analysts expected 68 cents, resulting in an earnings surprise of nearly 31%. However, it beat revenue estimates by $1.9 billion, reaching $47.8 billion. The company reaffirmed its full-year adjusted operating income guidance at a midpoint of $11 billion and increased adjusted free cash flow guidance by $1 billion to a midpoint of $8 billion. Declining margins resulted in lower earnings on higher revenue. Operating margin fell 270 basis points to 5.8%. Ford Motor (F) Price Chart for Thursday, July, 25, 2024 The company sold more vehicles and charged more per vehicle, but higher costs wiped out these gains, causing a drop in operating income. These higher costs came from Ford needing to increase its warranty reserves, which pay for malfunctions in its previously sold vehicles. The company has had persistent quality control issues over the last several years. In 2022, it issued 65 separate recalls that affected around 8.6 million vehicles, the most of any U.S. automaker. In June 2024, it recalled 550,000 F-150 trucks. CEO Jim Farley said that the firm is seeing positive momentum in its quality control issues. He noted the firm jumped significantly in JD Power’s Initial Quality Study for vehicles, as well as internal measures of improvement. Results from the Ford Model e segment continued to disappoint. For every dollar in sales of these vehicles, $2 had to be spent, resulting in an operating margin of -100%. The bright spot was in the Ford Pro segment. There, income grew by 8%. But margins still fell by 20 basis points. Ford's Short-Term Struggles Likely to Continue Ford released earnings, and shares plummeted in after-hours trading, dropping over 11% by 5:15 Eastern time. It is interesting to see that the company did not adjust its guidance for the full year despite these poor results. The company seems to believe that its Ford Pro segment will grow stronger than expected through the rest of the year while Ford Blue will perform worse. One positive piece of news for Ford is that it is moving away from the idea of electric trucks and favors smaller EVs. Farley said that enormous EVs “are never going to make money." The company plans to introduce a $30,000 electric vehicle in the next couple of years that it believes will be profitable. It is good to see that Ford is realizing its mistake and going back to gas-powered trucks. Ford Motor MarketRank™ Stock Analysis Overall MarketRank™ 4.04 out of 5 Analyst Rating Hold Upside/Downside 24.6% Upside Short Interest Healthy Dividend Strength Strong Sustainability -4.42 News Sentiment 0.22 Insider Trading Selling Shares Projected Earnings Growth -0.99% See Full Details In the short term, it is hard to see improved results coming from Ford. The auto industry is very cyclical, and high interest rates only reduce affordability. Additionally, the quality control issues will likely persist in the short run, as the firm’s supposed improvement should be in its newest vehicles. Monitoring its transition back to its core competencies in gas trucks and developing its low-cost EVs is essential to predicting its long-term success. The range of analyst price targets for Ford is wide. Bank of America recently raised its target to $22, which implies an upside of 61%. This upside is based on Ford’s closing price of $13.67 on July 24. However, others have targets as low as $10. Before you consider Stellantis, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Stellantis wasn't on the list. While Stellantis currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
How Much Should You Be Investing? Try Our Calculators 2024-07-25 13:00:00+00:00 - What percentage of your income should you devote to investing each month? If you start investing today, when can you retire? How much of your portfolio should be allocated to stocks? When saving for retirement and other financial goals, such as buying a home, it can feel like the list of questions is never-ending. But you don't have to come up with the answers on your own. Keep reading to learn how MarketBeat’s calculators can help you create a personalized investing plan with your unique goals. Assess Your Current Finances Before you determine how much you need to invest to achieve your financial goals, it's important to determine how much you can afford to invest. Crafting a realistic investing plan improves the likelihood of sticking to it, ensuring the growth of your emergency and retirement funds over time. By evaluating your current finances, you can create a sustainable strategy that aligns with your income, debts, and savings, setting a solid foundation for your financial future. How Much Debt Do You Have? Existing debts will also majorly impact your ability to invest each month. Generally, it’s a good idea to pay off high-interest debts like credit cards and car loans before devoting excess income to investments. This is because the interest that accrues on these debts usually outweighs the potential benefits you could see from investing. For example, the average interest rate on a credit card in the United States is 27.7%, meaning that interest accumulates at a rate of 27.7% of your outstanding balance per year. When compared to the 10.5% annual average return of the S&P 500, it’s easy to see how investing before repaying debt can result in a net loss. Do You Have Emergency Savings? Whether or not you have household emergency savings also factors into your investing capabilities. If you don’t have an emergency fund of at least $1,000, prioritize saving up for this goal in a liquid cash account — this will help you avoid taking on expensive debt in the event of a sudden, unexpected expense. After reaching $1,000 in savings, you’ll want to continue saving until you have three to six months’ worth of living expenses in cash. Leaving yourself with a cash safety cushion helps you take more responsible risks when investing in individual stocks. Decide on Your Investing Goals After determining how much you can invest per month based on your income and immediate debt needs, you can begin setting both short-term and long-term financial goals. Your savings goal and timeline will affect the best assets to invest in. Create Short-Term Goals Short-term goals (like buying a car or saving up for a down payment) usually have a time frame of up to five years. For these goals, it's important to prioritize capital preservation over high returns. Therefore, the amount you invest should be conservative, focusing on low-risk, highly liquid assets. For example, if you’re saving for a car, you may want to hold funds in a high-yield savings account rather than shares of stock. MarketBeat's APY Calculator can help provide clarity on your potential investment returns. The primary goal of short-term investing is to ensure that the money is available when needed and not subject to significant value fluctuations. Determine Long-Term Goals Long-term goals (like saving for retirement or a child’s college education) usually have savings plans of at least five years. This longer timeline allows you to take advantage of compound interest and dividends, which helps your initial investment grow over time. For these investments, growth-oriented stocks and exchange-traded funds (ETFs) are often recommended. The ideal investment allocation for your financial portfolio will also vary depending on the number of years that you have left until retirement. Investing early and often gives you the opportunity to see higher overall long-term returns. Use our Retirement Calculator to help you see where you are in relation to your goal and what adjustments you may need to make. Beginner Tips for Investing Knowledge is power, especially when it comes to investing. Use these basic tips to start investing. Set Clear Goals: Creating a plan before you begin investing sets you on a reliable path to accomplish all of your goals. If you don’t already have a household budget, sit down with your finances to determine how much discretionary income you have at the end of each month. If you aren’t sure exactly how much money you earn per year, use Markebeat’s income calculator to do the math. Even if it’s just $5 per month, you could see significant returns with the power of compound interest. Creating a plan before you begin investing sets you on a reliable path to accomplish all of your goals. If you don’t already have a household budget, sit down with your finances to determine how much discretionary income you have at the end of each month. If you aren’t sure exactly how much money you earn per year, use Markebeat’s income calculator to do the math. Even if it’s just $5 per month, you could see significant returns with the power of compound interest. Start with Market Leaders: As you learn about investing, it’s better to start with major companies that feature market dominance and high market capitalizations if you decide to buy individual shares. Blue-chip companies are leaders in their respective industries and are usually better investment choices for beginners thanks to their comparatively lower volatility. As you learn about investing, it’s better to start with major companies that feature market dominance and high market capitalizations if you decide to buy individual shares. Blue-chip companies are leaders in their respective industries and are usually better investment choices for beginners thanks to their comparatively lower volatility. Consider an ETF: Another popular investment option for beginners, ETFs allow you to gain a position in multiple companies at once. These investments feature a “basket” of stock investments rather than shares of a single company, spreading your risk between multiple leaders within a stock sector. Another popular investment option for beginners, ETFs allow you to gain a position in multiple companies at once. These investments feature a “basket” of stock investments rather than shares of a single company, spreading your risk between multiple leaders within a stock sector. Invest regularly: After you’ve chosen assets to add to your portfolio, invest consistently over time. Choose a set amount of money you can afford to invest each period and stick to your goal. This strategy allows you to take advantage of dollar cost averaging, which produces statistically better returns over time when compared to trying to time the market. The MarketBeat Investment Calculator If you’re like most Americans, you have multiple financial goals for the future. Whether you’re beginning to save for retirement or determining how much you’ll have to spend each month in your golden years, the MarketBeat investment calculator is a great place to begin. The MarketBeat investment calculator shows you the projected growth of an investment that you make today based on a set annual interest rate. By accounting for annual contributions and the power of compound interest, our investment calculator helps you visualize a path toward financial success. Use the investment calculator to determine: How much an initial investment will grow over time How much you’ll need to invest now to retire The amount you should contribute to retirement each year, even if you’re starting to invest later in life How much to invest per month to reach a future financial goal Simply enter your information, like the number of years you’ll be in the market, your initial investment amount and how much you plan to invest each month or year. You’ll then learn how much a current investment will be worth years from now, how much to invest by age range depending on your goal, or when you’re set to reach your next financial milestone. Assisted Investing for Beginners There is no set amount of money that you “should” invest each month or year — the ideal percentage of your income to allocate to investments will vary depending on your own financial situation. If you have high-interest debt, focus on using any discretionary income available to pay it down before focusing on investing. You’ll also want to save an emergency fund sufficient to cover household expenses for at least three months. After meeting these basic goals, you can confidently devote a larger percentage of your disposable income to investing for the future. If you aren’t sure where to begin when setting goals, use Marketbeat’s investing calculator to get started. See how much an investment will grow over time — or the reverse, how much you’ll have to invest now to retire on schedule. Use MarketBeat for Informed Investing Staying on top of the news driving stock prices is another essential step to mastering the investing market. Sign up for Marketbeat’s daily newsletter and get a free trial of our premium research reports now to have breaking headlines delivered straight to your email inbox each morning.
Chipotle tops quarterly estimates, warns of margin pressure going forward 2024-07-25 05:50:00+00:00 - By Granth Vanaik and Waylon Cunningham (Reuters) -Chipotle Mexican Grill surpassed Wall Street estimates for quarterly sales and profit on Wednesday as demand for its rice bowls and burritos held up even as prices increased. Shares of the company pared early after-hour gains but were still 2% higher after executives said Chipotle expects margins to be under pressure for the next couple of quarters. The company's restaurant-level operating margin rose to 28.9% from 27.5% a year ago. It said it expects margins to be around 25% in the third quarter. Chipotle also said on Wednesday it would buy back $400 million worth stock. The California-based chain has been able to buck a larger slowdown in customer traffic within the U.S. restaurant industry, partly because Chipotle's loyal customers kept returning to its outlets despite inflation straining household budgets. "The second quarter was outstanding as successful brand marketing, including the return of Chicken al Pastor, drove strong demand to our restaurants," CEO Brian Niccol said, referring to one of the chain's burrito bowl options. The company recorded foot traffic growth of about 17% during the quarter, outperforming the wider fast-food and quick service restaurant category's traffic increase of only 0.63%, according to Placer.ai. Chipotle's comparable sales rose 11.1% in the second quarter, compared with analysts' average estimate for a 9% increase, according to LSEG data. Adjusted profit of 34 cents per share beat analysts' expectations by 2 cents. The company has benefited from incremental menu price hikes intended to offset the high costs associated with raw materials and labor. In April, it undertook a 6% to 7% menu price increase in California after a law boosted the minimum wage for fast-food workers to $20 an hour. "While many restaurants are struggling, Chipotle continues to beat expectations because consumers see it as a good value," Emarketer analyst Zak Stambor said. The upbeat results come just weeks after Chipotle's shares began trading on the New York Stock Exchange following a 50-for-1 split of its common stock that the restaurant chain's shareholders approved on June 6. It continues to expect comparable restaurant sales growth in the mid-to-high single-digit percentage for 2024. (Reporting by Granth Vanaik in Bengaluru; Editing by Devika Syamnath and Bill Berkrot)
Chipotle Q2 earnings blow past expectations, boosted by brand loyalty and value proposition 2024-07-25 04:48:00+00:00 - Chipotle (CMG) is devouring expectations, even as the restaurant industry struggles with cautious consumers. On Wednesday after market close, the burrito chain reported earnings that beat Wall Street's estimates across the board, including on revenue, earnings, and same-store sales. Revenue jumped 18.2% year over year to $2.97 billion, versus expectations of $2.94 billion. Adjusted earnings per share came in at $0.34, compared to an estimate of $0.32. Same-store sales jumped 11.1% year over year, versus the 9.23% Wall Street anticipated. In Q1, same-store sales were up 7%. CEO Brian Niccol called the quarter "outstanding," thanks to "successful brand marketing" alongside the return of the popular Chicken al Pastor. Foot traffic jumped 8% in the quarter, more than the 6.3% expected. Prior to the report, UBS analyst Dennis Geiger called the company "one of the best positioned concepts to sustain sales momentum in a tough macro given customer brand affinity and a solid value for the money proposition." But choosier customers and value meals from fast food players like McDonald's (MCD) could pose a threat, wrote Wedbush analyst Nick Setyan in a client note. "On the other hand, we'd rather err on the side of caution and view quick-service restaurant's aggressiveness as a near-term (even if on the margin) headwind at Chipotle, Wingstop, and Shake Shack," he wrote in a note to clients. Workers fill food orders at a Chipotle restaurant on April 1, 2024, in San Rafael, Calif. (Justin Sullivan/Getty Images) (Justin Sullivan via Getty Images) Bernstein analyst Danilo Gargiulo, who has an Outperform rating and price target of $80 on the stock, wrote that there are more levers the fast-casual restaurant could pull to keep the flame burning long term. They include adding late night or breakfast hours, revamping its loyalty program, and leaning into its Gen Z fans, as the demographic increasingly becomes household decision-makers. In June, the company conducted its first 50-for-1 stock split. Shares have since fallen nearly 18% in the last month. Shares jumped roughly 14% in after-hours trading following the earnings results. Here's what Chipotle posted in Q2 2024, compared to Bloomberg consensus data: Revenue: $2.97 billion versus $2.94 billion Adjusted earnings per share: $0.34 versus $0.32 Same-store sales growth: 11.1% versus 9.23% For 2024, the company expects sales growth of mid- to high-single digits for the full year, which was up from the previous guidance of mid-single-digit growth set in Q4 of last fiscal year. Chipotle ended Q2 with 3,530 stores, slightly less than the 3,540 locations anticipated. In Q2, Chipotle opened 52 new restaurants, with 46 locations featuring its drive-through Chipotlane. This year, it expects to open 285 to 315 new locations, with more than 80% of them having the drive-through concept. Long term, it plans to operate 7,000 restaurants in North America. Story continues — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com. Click here for the latest stock market news and in-depth analysis, including events that move stocks Read the latest financial and business news from Yahoo Finance
'Fear gauge' hits three-month high as US stocks sell off 2024-07-25 04:42:00+00:00 - By Saqib Iqbal Ahmed NEW YORK (Reuters) -A hefty U.S. stocks sell-off sent Wall Street's most watched gauge of market volatility to a three-month high and boosted options trading volume on Wednesday, though strategists saw little evidence of panic. The S&P 500 slipped 2.3%, on pace for its worst daily loss since late 2022, after Tesla and Alphabet reported lackluster earnings, prompting investors to question if the 2024 rally fueled by Big Tech and artificial intelligence is sustainable. As stocks tumbled, the Cboe Volatility Index - known as Wall Street's fear gauge because it measures demand for protection against stock swings - shot to 18.46, the highest since late April. Options on the VIX changed hands at nearly twice the usual pace on Tuesday, Trade Alert data showed. The sell-off spotlighted the broader market's vulnerability to any weakness in Big Tech, which has boosted indexes even as it sparked concerns over stretched valuations and recalled the dotcom boom more than two decades ago. Still, the decline so far has been more an orderly retreat than a rout, options market participants said. "We're not seeing a whole lot of fear in the marketplace, meaning that people aren't going out and trying to buy protection aggressively," said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. "It's kind of very orderly and kind of passive, which indicates to me that nobody's in a bad spot right here yet." Despite the recent wobble, months of strong equity market returns have likely left investors in a strong position to stomach a modest uptick in volatility, Tym said. The S&P 500 is up 14% year-to-date, while the tech-heavy Nasdaq 100 - which fell 3.5% on Wednesday - has gained 13%. The indexes are off 4% and 8% from their all-time highs, respectively. Nvidia, whose blistering rally has fueled a big part of the broader market's gains, fell 6% on Wednesday but is still up about 130% for the year. The VIX index at 18 remains below the peaks touched during recent weak market episodes. In October the index climbed as high as 23 during a sharp sell-off. Big tech earnings is not the only thing on investors' minds. Political uncertainty, an expected shift in Federal Reserve policy and the seasonally weak stretch for stocks in September and October have raised the allure of portfolio protection for some investors. Others, however, were taking advantage of the greater market volatility to bet that calm will return soon. "While the crowd is hedging and hoping to time the in and out with that hedge, I'm shorting UVXY/VXX outright, as it climbs, and will simply await the inevitable plunge in volatility," said Seth Golden, president of investment research firm Finom Group. He was referring to ProShares Ultra VIX Short-Term Futures ETF and the Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN, ETFs that rise in value when volatility rises. Story continues On Wednesday, UVXY was up 20% and the VXX rose 14%. (Reporting by Saqib Iqbal Ahmed; Editing by Richard Chang)
This retirement misstep could cost you more than $100,000 in savings. Here's what to know. 2024-07-25 01:43:00+00:00 - Making Ends Meet: Most Americans feel unprepared to begin retirement Making Ends Meet: Most Americans feel unprepared to begin retirement 02:05 Millions of workers are making a critical mistake with their IRA rollover accounts — one that could cost them $130,000 or more in foregone investment gains, according to new Vanguard research. The issue stems from a quirk in the retirement system, with individual retirement accounts legally required to steer all direct contributions and most rollovers into cash, making it the "de facto default" for IRAs, Vanguard noted. That's not the case for 401(k)s, which have default options that direct workers into investments like target-date funds and the like. The problem, Vanguard says, is that many workers appear unaware that their IRA savings are funneled into cash, a historically poor performer when compared with equities and other investments. Keeping one's retirement assets in cash not only means that workers are losing out on the potential long-term gains, but are also eroding the value of their savings due to inflation. Among IRA rollovers from 2015 that were tracked by Vanguard, 28% were still invested in cash seven years later — meaning that those accounts lost seven years of potential investment growth. When the financial services firm surveyed workers about their IRAs, two-thirds were unable to accurately say what they were invested in. Only one-third said they were intentionally parking their money in cash. That suggests many workers are likely unaware their IRA savings are sitting in cash, said Andy Reed, head of investor behavior research at Vanguard and a co-author of the study. "If you think you are invested, think again," Reed told CBS MoneyWatch. "I know a lot of people with IRAs who think they are invested, and when they check they are unpleasantly surprised." The difference in investment returns between cash and equities is stark. Large U.S. stocks returned an average of 10.5% a year from 1970 through 2023. Cash and money market funds typically earn very little interest, although some accounts are currently paying rates of about 5%, a result of the Federal Reserve's flurry of interest rate hikes. "We've had extended periods where cash is paying basically next to nothing, so you have no chance of growth," Reed noted. Missing out on $130,000 Over time, sticking with cash can create a huge drag on your retirement savings, Vanguard said. Their research shows that investors who are under 55 years old and who put their IRA funds into a target-date fund, versus staying in cash, will enjoy an increase of at least $130,000 in retirement assets by age 65. That's significant given that the average retirement account holds about $88,000 in savings. An additional $130,000 means workers "could retire earlier," Reed said. "Secondly, they would have less likelihood of running out of money in retirement. And the third thing is you can enjoy a higher standard of living in retirement," such as taking one more vacation each year or not being forced to downsize your home. Altogether, Americans are giving up $172 billion in investment gains each year due to their IRA's cash investments, Vanguard calculated. And that's likely to be a conservative estimate, partly because the figure only includes rollovers and excludes direct contributions, which are also put into cash by default, Reed said. What's more, the people who are most likely to keep their IRA savings in cash are typically those who need the most help building retirement savings, Vanguard found. Younger investors, as well as low-income workers and women, are most likely to fall into the cash trap, which could be due to lack of awareness, Reed said. "It's really unfortunate because these are the most vulnerable populations," he noted. How to avoid the cash trap First, Reed advises to check your IRA accounts. From there, you can pick new investment options, switching from cash to equities, mutual funds or other vehicles. "Taking a look at how your IRA is invested is the most important step," Reed said. But Vanguard is also urging new legislation that could address the problem's root by requiring IRA contributions and rollovers to be placed into a so-called qualified default investment alternative, or QDIA. This became the law for 401(k)s through the Pension Protection Act of 2006, which allowed these retirement plans to set default investments, such as target-date funds, for people who neglect to make investment choices. Such a change would require legislation, which would not be an easy lift, Reed added. In the meantime, investment companies can nudge IRA investors to look at their plans, which would require workers to take an active role in their investments, he noted. Either changing the default savings options or getting more people to peek at their IRAs could pay off in the long-term by giving workers a better chance of building a nest egg. "It's not a silver bullet for the retirement crisis, but the crisis is significant, and where we see the most acute gaps for preparedness is at the lower end of the socio-economic spectrum, where this solution would disproportionately help," Reed said.
Delta passengers can count on "minimal" flight cancellations Wednesday, CEO Ed Bastian says 2024-07-24 22:29:00+00:00 - What to know about consumer rights after Delta cancels flights What to know about consumer rights after Delta cancels flights 05:00 Delta Air Lines CEO Ed Bastian said the carrier is making progress restoring operations, noting he expects "minimal" flight cancellations on Wednesday after five days of disruptions caused by the CrowdStrike software outage. As of 2:10 p.m. Eastern Time on Wednesday, Delta had cancelled 48 flights, or roughly 1% its scheduled daily trips, according to tracking service FlightAware. Roughly 500 Delta flights were delayed. Those numbers are down sharply from the preceding five days, when a botched technology update last week by CrowdStrike, a cybersecurity company whose software is widely used in Microsoft Windows computers, forced Delta to scrap thousands of flights. Bastian said in an update posted on Delta's website that service should be fully restored as of Thursday. "Thursday is expected to be a normal day, with the airline fully recovered and operating at a traditional level of reliability," he said. Meantime, Delta said it will reimburse passengers for unplanned travel expenses that include purchasing tickets on other airlines, renting cars, traveling by train and other costs. Beyond angering frustrated travelers during the busy summer travel season, the chaos has spurred an investigation by the U.S. Department of Transportation's Office of Aviation Consumer Protection over what the agency referred to as "concerning customer service failures." Bastian acknowledged the airline's slow pace of recovery following the CrowdStrike outage, with other impacted airlines getting back on track more quickly. "While our initial efforts to stabilize the operations were difficult and frustratingly slow and complex, we have made good progress this week, and the worst impacts of the CrowdStrike-caused outage are clearly behind us," he said in Wednesday's memo. Delta previously blamed its inability to swiftly restore operations on a crew scheduling tool that ran on Microsoft Windows and that was affected by the software outage. But some aviation industry experts, as well as federal regulators, say that Delta was insufficiently prepared for the business disruption and failed to adequately serve customers in its aftermath. The unprecedented tech crash, which shut down banks, hospitals, government agencies and other organizations around the world, has already cost large U.S. companies more than $5 billion, according to Parametrix, provider of internet cloud monitoring and insurance services. Bastian is now in Paris for the start of the 2024 Olympics, which opens on Friday. Delta is the official airline of the U.S. team. "Ed delayed this long-planned business trip until he was confident the airline was firmly on the path to recovery," Delta said in a statement. "As of Wednesday morning, Delta's operations were returning to normal. Ed remains fully engaged with senior operations leaders." Bastian's trip to France drew a rebuke from Delta's flight attendants. "While Ed was flying to Paris last night, crew were sleeping in airports across the country," the Delta Association of Flight Attendants-CWA organizing committee said in a statement. "Flight Attendants expect an apology and accountability. We provided a roadmap to recovery and care for the affected crew members. Instead of taking ownership, Ed took a first class seat." —CBS News' Kathryn Krupnik contributed to this report.
Amazon Stock Jumps As NBA Signs Prime Video Broadcasting Deal: What You Need To Know - Amazon.com (NASDAQ:AMZN) 2024-07-24 22:24:00+00:00 - Amazon.com Inc AMZN shares are rising in Wednesday’s after-hours session after the National Basketball Association (NBA) announced a deal in which Prime Video will telecast NBA games over the next decade. What Happened: The NBA announced a renewal of its partnership with Walt Disney Co DIS, as well as new agreements with NBCUniversal and Amazon under which ABC/ESPN, NBC/Peacock and Prime Video will telecast NBA games beginning with the 2025-26 season. The deal is set to remain in place through the 2035-36 season. “Our new global media agreements with Disney, NBCUniversal and Amazon will maximize the reach and accessibility of NBA games for fans in the United States and around the world," said NBA Commissioner Adam Silver. "These partners will distribute our content across a wide range of platforms and help transform the fan experience over the next decade." Check This Out: Could Warner Bros. Vs. Amazon Battle Be Brewing For NBA Rights? Mark Cuban Shares His Suggestion Under the new deal, Amazon will distribute 66 NBA regular-season games on Prime Video each season. In addition, Prime Video is now set to stream the Championship Game of the Emirates NBA Cup. Amazon’s Prime Video will also distribute all six NBA Play-In Tournament games and stream approximately one-third of the first and second rounds of the playoffs each year. Prime Video will also stream one of the two Conference Finals series in six of the 11 years on a rotating basis with NBCUniversal. Amazon plans to distribute NBA games globally as part of Prime Video and offer an expanded package of games in select territories. The expanded package includes a minimum of 20 additional primetime regular season games each year, a Conference Finals series each year and the NBA Finals in six of the 11 years. The NBA also announced that Amazon’s Prime Video will become a strategic partner of the NBA, making it the third-party global destination of NBA League Pass. AMZN Price Action: Amazon shares were up 0.42% after hours at $181.59 at the time of publication Wednesday, according to Benzinga Pro. Photo: Shaheerrr from Shutterstock.
Harris' Wall Street allies strategize on private call, Rubin, Lasry, Wolf among them 2024-07-24 22:21:00+00:00 - U.S. Vice President and Democratic presidential candidate Kamala Harris arrives to boards Air Force Two at Joint Base Andrews in Maryland, U.S. on July 24, 2024. Vice President Kamala Harris' allies on Wall Street huddled on a private Zoom call Wednesday to strategize how to defeat former President Donald Trump, according to people familiar with the matter. The call featured dozens of major financiers backing Harris, and lasted over an hour. They include Avenue Capital CEO Marc Lasry, Centerview Partners co-founder Blair Effron, Lazard President Ray McGuire, former Treasury Secretary and veteran banking executive Robert Rubin, businessman Tony Coles, Paul, Weiss chairman Brad Karp, founder of 32 Advisors Robert Wolf, longtime asset manager Brian Mathis and Jon Henes, the CEO of C Street Advisory Group, according to these people. Those who spoke to CNBC did so anonymously in order to speak freely about private matters. CNBC was first to report on the scheduled call Tuesday morning. People on the call said it was the first gathering that had brought all of these major players together in finance and business since President Joe Biden dropped out the race. The goal was to start organizing a large scale fundraising effort in support of Harris' campaign. "We need to raise a ton of money," said someone on the call, describing the first portion of the conversation. Rufus Gifford, the finance chair for the Harris campaign, fielded questions and comments on the call, while encouraging people to give and help raise money for the campaign, according to people familiar with the event.
NextEra considers restarting Iowa nuclear plant amid rising demand for carbon-free energy 2024-07-24 22:16:00+00:00 - NextEra Energy is considering restarting a nuclear plant in Iowa as demand for carbon-free energy grows amid a historic surge in electricity consumption. The Duane Arnold Energy Center in Palo, Iowa ceased operations in 2020 after 45 years of service. NextEra CEO John Ketchum said Wednesday a thorough review of the risks is needed to see if restarting the reactor is feasible. "There would be opportunities and a lot of demand from the market if we were able to do something with Duane Arnold," Ketchum said on NextEra's second-quarter earnings call Wednesday. "We're looking at it," he said. "But we would only do it if we could do it in a way that is essentially risk free with plenty of mitigants around the approach. There are few things we would have to work through." The Duane Arnold plant was scheduled for retirement in late 2020 after a key customer, Alliant Energy, sought cheaper energy alternatives. The plant ceased operations two months earlier than expected after a derecho, a powerful windstorm, damaged some portions of the plant including its cooling towers. Nuclear energy fell out of favor over the past decade as plants struggled to compete with cheaper energy sources such as natural gas and renewables. The 2011 Fukushima nuclear accident in Japan also raised safety concerns. A dozen nuclear reactors in the U.S. closed from 2013 through April 2021, according to the Congressional Research Service.